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Kate Welling's Seminal Interview With Themis Trading On Market Structure
Some, like Sal Arnuk and Joe Saluzzi, who have long been warning about the imminent threat of a May 6-like event, only to be proven correct, not only on that score, but also on their admonitions that the entire market structure is broken, end up being interviewed by such exalted financial figures as Kate Welling. Others, like their arch nemesis Irene Aldridge, who has long been warning about the imminent extinction of all those who do not buy into the religion of "HFT or bust", end up being mocked by the cash cow from The Jon Stewart Show. We present the complete interview in which Sal and Joe deconstruct market topology, HFT, innovation, market manipulation, front running, Flash trading, collocation, VWAP, Reg NMS, and everything else you have always wanted to know but been afraid to ask.
Welling@Weeden: Playing Fair: Themis Trading Picks Apart Market's Post-Reg NMS Structural Flaws
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/snniiiiifff/ And Lloyd Bridges says, "Looks like I picked the wrong time to try and give up pulling all nighters!"
Thank You!
http://www.youtube.com/watch?v=GeI5ke0BENw
This is why you need the Robert Downey Jr. Iron Man Jack Rabbit Turbo High Energy Trading System Program.
http://www.youtube.com/watch?v=Dtc58sTsTpE&NR=1
the entire market is too big to fail. why do you think we did not go any lower during the flash crash. your megalomaniac overlords printed money and cemented the bottom with it, no more shares to be had below 10k so the only way is up.
This is the CNBC video with Saluzzi and Aldridge:
http://www.youtube.com/watch?v=_A28Zy9vR_A
Price of gold on that date $976 (July 24, 2009).
TD- Awesome! Thank you.
Seconded. This article is superb.
All part of the Wizard's "Grand Reflation" experiment: stocks must reflate.
Call it: "The Goldilocks Depression". They'll try to keep deflation on a slow glidepath with high doses of new liquidity without stirring up hyperinflation. Meanwhile there's the worst of both worlds: high unemployment, deflating real estate, incomes and retirement assets. And the cost of energy, raw materials and food are robust out of all proportion to economic activity. Hidden sources of inflation abound: education, healthcare, insurance, consumer credit, bank fees, transportation, taxes.
They think it's Goldilocks, but to the middle class it's angry bears.
"Hidden sources of inflation abound: education, healthcare, insurance, consumer credit, bank fees, transportation, taxes."
Too true. Unfortunately, we are in a hidden inflationary cycle - well, not so hidden. Hidden to the sheeple. Cost of Living is increasing dramatically while we are being whored out to pay for the follies of so called "masters" of business administration. Truly, as one of my wise friends stated: "If there are so many masters, why is this economy so shitty?"
This is the most succinct and up to date argument against everything that is "wrong" with current equity market structure - all the cumulative unintended consequences of low commission mandates, electronic and speed biases, market fragmentation in the name of competition and a development toward hyper complexity/low transparency in general. Everyone in America should read this (email away!). The US capital markets aren't just some elitist casino toy (well up until very recently anyway) they are one of the few real national treasures we have left. It's a debate worth having and there isn't enough of it.
That said I know there are smart, well respected market participants in the business that think these guys are idiots. Real inside baseball stuff here.
That was an awesome interview!! Super thanks for putting it up.
Damn, interesting article. I've been reading what I can on HFT... not so much out there other than a few articles and a textbook or two.
My takeaway, a lot of the new is a lot like the old:
The undoing of the late 1920s market included:
- too much leverage (now it skews institutional and much bigger)
- interrelated ownership of exchngs and HFT firms is reminiscent of the incestual trusts and funds of the late '20s
- Lack of understanding by regulators/general public as to what really drives the market
And, reminiscent of LTCM near disaster, as margins shrink and leverage goes up, the risk level explodes. Something internal to the droids, something the hubris of creators prevents them from foreseeing, will be their undoing. Maybe regulatory change. Maybe something as simple as too many competitor HFT firms = no more margins. It's so much like Terminator. I can't wait until we find out how these firms have reengineered trades of the past (bring on John Connor). Will they ever be able to reengineer the future? They're milliseconds ahead of everyone already...I don't think it takes much effort to keep this market propped up unless somebody big tries to sell. So far that hasn't happened. Too big to fail, extend and pretend, all very effective tools in managing a fraud-based eCONoME. Don't alarm the herd. lol
The HFTs still need suckers on the trade, and on these low volume ramps it has been the shorts' stops being taken out. There is no such thing as hidden stops, just makers and algos working together.
The mnarket will go down when there are no more short stops to squeeze; then they will rip off the bultards by taking it down.
Short with conviction. No stops. No leverage.
Please forward article to "kid dynomite".
fear not, DCB, i read it. i'll tell you what - if you make a generous donation to my tip jar, i'll waste my time writing a counter to the post and arguing with you about what's wrong with it.
there are definitely some good points and clear explanations in the interview. of course, there are also some blatant ignoring of essential facts too, and Sal strays early with some logic. hint: just because his mom doesn't have the means or skill to do something doesn't mean that no one else should be allowed to do it either.
Then will anyone waste their time and read your blog?
Thanks for that, because we definately do want to know, but are indeed afraid to ask.
We just kind of nod along and avoid sitting in the front row so we wont be singled out.
My take-away from this article is:
Each time a stock is held (not purchased) for 1 second, it is posted to the Stock Ticker and the "Holder" receives a rebate for having the Ticker post as a result of their action. This data posting market is paid for by fees paid by the all players, institutions, etc. This rebate fee "nut" is what the HFT algos are after. They have gamed the system and could care less about the "reason the market exists" to "generate capital for business."
Sick.
Listen up people......the entire financial system is just an OBAMA-O-NATION!
The picture below says it all:
http://mycrazydream.net/wp/wp-content/uploads/2010/02/bush-obama.jpg
Listen up people.....the entire financial system is just an OBAMA-O-NATION!
The picture below says it all:
http://mycrazydream.net/wp/wp-content/uploads/2010/02/bush-obama.jpg
Good morning... What a fucking hangover... What happened? Ah, now I remember... We beat Kim Jong Il's team...
The world has ended already? The oil is still leaking into the Gulf of Mexico?
"Be on your guard against the leaven of the Pharisees, which is hypocrisy and deception. Everything that is secret will be brought out into the open. Everything that is hidden will be uncovered. What has been said in the dark will be heard in the daylight. What has been whispered to someone behind closed doors will be shouted from the rooftops." Luke 12:1-4
Pharisees Indeed. Irene Aldridge gave a great "Gecko"speach, but I would have liked to have seen the hand washing as well. I have known many pretty women in my day and believe me she's a beaut. To rationalize fraud and theft as modern inovation, ORELY! This is as old as the original profession. The odds are better in Vegas and the working girls there have a union.
I have nothing against working girls. I am only discussing price.